Real estate bill hits road block

The Centre’s plan to regulate the real estate sector by safeguarding consumers from land sharks has hit a road block with several states opposing some provisions of a proposed bill.

The Real Estate (Regulation and Development) Bill drafted by the Union Ministry of Housing and Urban Poverty Alleviation is facing strong resistance from Uttar Pradesh and Chhattisgarh, which say that several provisions of the bill will allow the Centre to infringe on the states’ rights. They say that the Centre cannot make a law for the sector as land is a state subject.

West Bengal and Tamil Nadu have not submitted their opinions so far, while some states have sought more clarifications from the Centre on the bill.

The Centre, which had planned to introduce the bill in the budget session of Parliament, has held meetings with the states and urged them to submit their opinions at the earliest.

The Centre has allayed fears that it will impinge on the states’ rights.  A senior official in the ministry told Deccan Herald that the states are free to make their own bill on the lines of the Centre’s and can have their own regulatory authorities. The Centre hopes that the bill will be placed in the monsoon session of Parliament.

Redrafted bill

The bill, which was first mooted in 2009, was redrafted last year after some states sought major changes. Even after modification, resistance from some of the big states like Uttar Pradesh may lead to further delay of the bill, said the official.

As per the draft bill, promoters could face three years’ jail or/and a penalty up to a tenth of the estimated cost of the real estate project for failure to comply with its key provisions. The draft also has a provision for returning the amount paid by a buyer, along with interest, if a promoter fails to complete a project on time and give possession as per the agreement.

Besides, to ensure timely completion of the project, real estate companies must compulsorily deposit 70 per cent of the funds received from apartment or plot buyers in a separate bank account. All real estate companies have to register with the authority. At the Central level, a real estate appellate tribunal has been proposed to hear the grievances.